Tri-Lakes Medical Center

Published 12:00 am Friday, July 31, 2009

‘Precluded’ object to hospital’s filing

By John Howell Sr.

A flurry of objections was filed in U. S. Bankruptcy Court last week in protest to a proposed agreement between the Mississippi Division of Medicaid and Tri-Lakes Medical Center.

Dr. David Ball and Sarah Dale Ball, who had been named as “precluded persons” in the proposed agreement, filed objection July 23 through Oxford attorney J Hale Freeland.

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In a separate filing, Ray Shoemaker, Bonnie Moore, Tammy Hutchinson and John Gregory, also named in the proposed agreement as “precluded persons,” state their objections through Jackson attorney Michael A. Heilman.

In the proposed agreement, Medicaid and Tri-Lakes agree that the bankrupt Batesville hospital owes Medicaid $24.4 million. However, the agreement includes a provision that the buyer of the facility will be free from the Medicaid liability in a pending section 363 asset sale through the bankruptcy court if the new hospital owners do not include a host of “precluded persons or entities” named in the proposed agreement and associated with Tri-Lakes prior to November, 2007. Tri-Lakes filed for chapter 11 bankruptcy in August, 2007.

Dr. Ball has served as the hospital’s chief of staff and is a member of the Board of Directors of Physicians and Surgeons Hospital Group, the non-profit entity which owns the facility. His daughter, Sarah Dale Ball, is former human resources director at the facility.

Ray Shoemaker was administrator at the facility. He left Tri-Lakes in late 2006. Bonnie Moore was formerly director of the hospital’s behavioral health center or “west campus;” Hutchinson is former chief nursing officer and Gregory former chief financial officer.

“The settlement proposed by Tri-Lakes exceeds the authority of Division of Medicaid by providing (it) the right to arbitrarily veto any person from the employ (of the hospital), … without any due process … in violation of the Balls and their family’s due process rights protected under the Constitution,” the Balls’ objection states.

“The limitations in the proposed Settlement are penalties and sanctions against Sarah Dale Ball and David Ball, M. D., which cannot occur without notice and an opportunity to be heard,” the objection continues.

“What has finally become the ‘last straw’ for me … is the notice to file a request with the judge (within one week and without forewarning to me) that not only would prevent me from being able to serve in any leadership or administrative capacity with a new hospital, but would also prevent my family and any future heirs of mine from ever being able to serve,” Dr. Ball stated in a letter to the editor published July 24.

The proposed agreement was filed with the court July 13. U.S. Bankruptcy Judge David Houston issued an order on July 15 setting a July 23 deadline for motions objecting to the proposed agreement.

In the objection filed on behalf of Shoemaker, Moore, Hutchinson and Gregory, Heilman describes the proposed agreement between Medicaid and Tri-Lakes as “an untenable, unenforceable contract.

“This Court should rule that the Agreement is void for illegality as against public policy because Tri-Lakes agrees to a debt that it is released from while other parties who are potentially indebted to the same debt are not released,” their objection continues.

The Shoemaker (et al) objection asks the court to release them and strike their names from the agreement or that an order be issued “instructing that nothing … in the Agreement … shall serve as an adjudication of any rights of Third Parties, …” and that their names be stricken or the Agreement be sealed, among other requests.

Joining in objection to the proposed agreement filed on July 13, are the U.S. Department of Health and Human Services (HHS) through assistant U.S. Attorney Ralph M. Dean III and the Mississippi Attorney General through special assistant Geoffrey Morgan.

The U.S. Attorney’s objection is styled as “Limited” and describes as “potentially misleading” language in a section of the proposed agreement that refers to the “Debtor’s ‘Medicare/Medicaid Provider Agreement.’”

“In the interest of clarity, HHS maintains that the record should reflect that the proposed settlement with the State of Mississippi Medicaid program has no bearing whatsoever on the Debtor’s Medicare provider agreement with HHS,” according to the U.S. Attorney’s objection.

Bankruptcy Judge David Houston, at the June 24 hearing, granted the state Attorney General’s request for more time to review the proposed agreement. “Until such time as the proposed settlement is approved by the Attorney General, … there is no settlement,” the objection states.

No orders have yet been issued responding to the other objections.